The latest amendments proposed to the Companies Act, 2013 vide The Companies Act (Amendment) Bill, 2017 is a step in lieu of removing complexities and creating a business-friendly environment in India.

The amendments raise the threshold for improving ease of doing business and support corporate governance & transparency. The amendments further prescribe strict action against defaulting companies to make the accountability regime more robust and increase the benchmark for the easy compliance scheme to Rs.100 Crore from Rs.20 Crore, enabling more companies to be eligible for the simple compliance regime. The birds eye view of the changes proposed are as follows:-

The Bill also proposes to simplify the compliance complications for the unlisted companies i.e. to be allowed to hold annual general meetings in places other than their registered office. An attempt has also been made to harmonize the rules relating to insider trading with the rules prescribed by the Securities & Exchange Board of India (SEBI) apart from allowing companies with common directors to give loans to each other. The Bill also proposes to make incorporation of companies easier by allowing self-declarations instead of affidavits from subscribers to memorandum and first directors. According to the Bill and unlike in the current Act, the Equity share capital will be the deciding consideration for establishing associate and subsidiary companies, and not both equity and preference share capital. The Bill has made the provision for reducing the penalty for procedural defaults as well on one person companies and small companies. In continuation with other reforms to enable a better ‘ ease to do business’, the proposed changes in the Companies Act,2013 will increase the inbound & outbound merger & amalgamations between Indian & Foreign companies, apart from ushering in a robust transparency and accountability ecosystem for India Inc..

The series of structural reforms undertaken by the government over the past 24 months has helped created an environment of greater confidence on longterm sustainable growth and has paved the way for investors to take long-term investment decisions leading to a sharp pick-up in M&A activity. This is evident from the accelerated pick up in M&A activity during this period. Hammurabi & Solomon has recently published a detailed knowledge report on “M&A Landscape in India”, which was disseminated during the ASSOCHAM National Summit on Mergers & Acquisitions. The report highlights various trends in M&A and Private Equity domain in the last 5 years along with an analysis of various factors resulted in the elevation of M&A in 2016. The detailed way forward has been elaborated after conducting PESTAL analysis of M&A eco-system in India. The complete version of the “M&A Landscape in India” is available at www.hammurabisolomon.in.